November U.S. Consumer Confidence Unexpectedly Falls to 88.7

Drop Puts Index at Lowest Reading Since June

U.S. consumers toned down their upbeat view of the economy this month, according to a report released Tuesday.

The Conference Board, a private research group, said its index of consumer confidence dropped to 88.7 in November from a revised 94.1 in October, first reported as 94.5.

The November confidence drop was unexpected and puts the index at its lowest reading since June. Economists surveyed by The Wall Street Journal had forecast the latest index to rise to 96.5.

The present situation index, a gauge of consumers’ assessment of current economic conditions, fell to 91.3 this month from a revised 94.4, first put at 93.7.

Consumer expectations for economic activity over the next six months weakened to 87.0 from a refigured 93.8, originally reported as 95.0.

“Consumers were somewhat less positive about current business conditions and the present state of the job market; moreover, their optimism in the short-term outlook in both areas has waned,” said
Lynn Franco,
director of economic indicators at the board.

The drop in sentiment even amid falling gasoline prices and improved labor markets adds a downside risk to consumer spending going into the holiday shopping season. Ms. Franco, however, played down the worry. “Income expectations were virtually unchanged and gas prices remain low, which should help boost holiday sales,” she said.

Consumers turned slightly more downbeat about current job prospects this month.

FILE - A man pays with a credit card while shopping at a Kmart store in New York.
AP

In November, 16.0% of consumers think jobs are “plentiful,” down from 16.5% thinking that in October. Another 29.2% this month describe jobs as “hard to get,” from 29.0% saying that last month.

The share of respondents anticipating more jobs in the next six months fell to 15.0% in November from 16.0% saying that in October, while the share anticipating fewer jobs jumped to 16.4% from 14.1%.

Income expectations also dimmed slightly. The survey showed 16.3% of households in November expect their incomes to rise in the next six months, down from 16.7% thinking that in October. Another 11.4% think their incomes will decline in the next six months versus 11.3% thinking that last month.